Information For Homeowners With Crumbling Foundations

A Crisis Affecting More Than Three Dozen Towns Across North-Central Connecticut

In recent years, more and more homeowners in our region have discovered that their home foundations are crumbling due to the presence of a mineral called pyrrhotite in the stone aggregate originally used to mix the concrete. During this time, I have met with affected homeowners, attended community forums, and discussed the matter with town officials and state legislators from the impacted regions. The high cost of repairs for homeowners, the prevalence of the problem in our region, and the potential economic impact to the state require a comprehensive response. I have been a persistent advocate for such a collaborative approach and I will continue to organize state and local officials, federal agencies, private industry, and other stakeholders to address this crisis head-on.

Courtney speaks to a homeowners group about crumbling foundations in 2015

For additional information or questions, contact the Connecticut Department of Consumer Protection at 1-800-842-2649 or email dcp.concrete@ct.gov.

The Department of Consumer Protection has also issued a warning to homeowners to be wary of scams to repair or replace faulty concrete. I urge consumers to take precautions before making any payments or signing contracts--read more here about ways to avoid scams.

In 2016, the Connecticut General Assembly passed, and Governor Malloy signed, Public Act 16-45, which allows homeowners with crumbling foundations to adjust their property assessments. Call your town assessor for assistance with this process. Click here to read the law

Some municipalities in the affected region have decided to waive local building and permitting fees associated with construction and repairs to homes with crumbling foundations. Call your town officials for further information on your town’s policies.

Courtney hosts a seminar at Ellington High School with a senior certified public accountant (CPA) at the IRS, Joseph S. McCarthy, for homeowners and contractors to learn more about the IRS Casualty Loss Deduction procedures in May 2018

What I am Doing

OnNovember 22, 2017, Congressman John Larson and I announced that the IRS approved our request for a "revenue procedure," a guidance document that allows homeowners with crumbling foundations to deduct the cost of repairs from their federal taxes as a casualty loss. In the months leading up to this decision, we discussed this problem with key federal officials, including former IRS Commissioner John Koskinen, National Taxpayer Advocate Nina Olson, and Secretary of the Treasury Steven Mnuchin, who made it clear that federal agencies understand the deep impact of this problem. The guidance issued by the IRS will now allow homeowners to deduct the cost of repairs made to home foundations for pyrrhotite-related damage on returns, and amended returns, moving forward. Homeowners can read the guidance here and consult with their professional tax preparer to determine whether their repairs qualify.

In August 2016, I received confirmation from the U.S. Department of Housing and Urban Development (HUD) that federal grant programs including the Community Development Block Grant and the HOME Investment Partnership program could be used to support housing remediation costs in communities affected by crumbling foundations. Connecticut already receives funding through this program annually to support housing initiatives across our state, and some of the funding has been targeted to support our region's response. I have worked extensively with local legislators, state agencies, and HUD staff to share information and assist in using this funding to alleviate the burden of crumbling foundations.

In addition to those two programs, in September 2017, the U.S. House of Representatives unanimously passed three amendments I authored along with Congressman Larson. These amendments would support our efforts with the IRS and HUD, as well as the National Institute of Standards and Technology, which could issue standards for pyrrhotite content in residential construction to help prevent a similar pyrrhotite-related problem in the future. While the amendments have not become law, this vote was the first time a chamber of the U.S. Congress expressed support for assisting Connecticut homeowners.

The response to this crisis must address the central problem of damaged homes as well as related issues, including questions regarding property-casualty policy changes, outstanding mortgage debt held by homeowners, and the impact of this problem on municipal budgets. I remain committed to investigating every possible source of federal assistance that may be available to local homeowners who need help, and I will continue my regular communications with state and local officials to develop the comprehensive solution this crisis requires.

As the state coordinates further assistance and information for homeowners, my office is always available as a resource for eastern Connecticut constituents. Please feel free to call my office at 860-886-0139 or email me with any questions.

More on Information For Homeowners With Crumbling Foundations

The IRS has determined that homeowners who make repairs to their crumbling foundations within the next three years can amend their 2017 federal tax filings to deduct the cost.

Under the updated guidance from the IRS, which U.S. Reps. John B. Larson, 1st-District; Joseph D. Courtney, 2nd-District; and Rihard Neal of Massachusetts announced Wednesday, homeowners will have through the end of 2020 to make qualified repairs to their homes and until April 2021 to claim those repairs on amended 2017 federal tax return.

“This is welcome news for homeowners in our districts,” the members said. “The additional three years afforded under this updated policy provides critical time for more homeowners impacted by crumbling foundations to make repairs and secure federal tax relief. Since enactment of the new tax law, we have been in regular contact with officials from the Treasury and IRS to explore ways to extend as much relief as possible to homeowners in spite of the changes made by the law. We are grateful for their attention to our concerns and the support they have provided today to homeowners struggling with the damage caused by crumbling foundations.”

“As the IRS confirmed in its letter, qualified taxpayers who paid to repair damage to their homes in 2017 or in prior open tax years will still able to deduct the cost of those repairs as a casualty loss on their 2017 returns. This is welcome confirmation for those homeowners who have already completed repair work on their homes and will soon begin to prepare their taxes,” said Courtney and Larson.

Congressmen Courtney Larson announced approval of new federal tax relief for homeowners dealing with crumbling foundations. The relief, released through an Internal Revenue Service (IRS) “revenue procedure,” follows nearly 19 months of work by the two members.

Congressman Joe Courtney (CT-2) welcomed the Connecticut General Assembly’s action on crumbling foundations in the state budget, calling it "a positive and constructive development in the response to crumbling foundations."

Congressman Joe Courtney (CT-02) and Congressman John B. Larson (CT-01) announced three amendments they authored in support of support Connecticut residents impacted by crumbling foundations passed in the House of Representatives. The amendments were added to an omnibus appropriations bill to fund the federal government which passed the House today. These amendments represent the first time that a full chamber of Congress has passed measures related to crumbling foundations in Connecticut.

U.S. Reps. Joseph D. Courtney and John B. Larson say they’re optimistic that homeowners with crumbling foundations will be provided tax relief for repairs following a meeting Monday with Treasury Secretary Steven Mnuchin.

The congressmen met with Mnuchin and Secretary for Tax Policy David Kautter at the Treasury Department headquarters in Washington, D.C., to discuss their request for an IRS “revenue procedure” — a guidance document that could allow homeowners to deduct foundation repair costs from their federal taxes.

We are encouraged that the National Taxpayer Advocate has committed to working with our offices and the IRS to secure relief for Connecticut homeowners impacted by crumbling foundations through the tax code. We still have a lot of work to do, but having a key federal official publicly acknowledge the merits of casualty loss tax assistance for local homeowners is an encouraging development. Our offices remain committed to investigating every possible source of federal assistance that could be used to homeowners with crumbling foundations.